TO BRIDGE OR NOT TO BRIDGE?? DO YOU KNOW HOW A BRIDGE CAN ASSIST YOU?
1) Bridge on New Purchase: This is helpful for those clients who have 20% to put down on their current home prior to selling their old (can come from Gift Funds or current HELOC), but they can’t Qualify for the new purchase loan under conventional guidelines. Under a purchase Bridge loan, there are NO Debt To Income Ratios to consider. The bank ONLY wants to know that the Bridge loan can be replaced by Permanent financing once their old home sells!
2) Bridge on Departing Residence: This program is beneficial for clients who have plenty of equity in their current home but can’t access it via normal channels, and they Qualify for the new purchase under Conventional guidelines carrying both home loans. This allows us to replace their current homes mortgage with an Interest Only loan program providing them the cash needed for their new purchase. When they sell their old home the Bridge loan is paid off.
3) Bridge on Both the Departing Residence and New Purchase: This is for clients who have plenty of equity in their current home, but Don’t qualify for conventional financing carrying both homes. In this case we provide a Bridge on departing residence to provide them the 20% down payment needed on the purchase. The Purchase Bridge loan doesn’t calculate the housing expense on departure residence so much easier to obtain. Once departure residence is Sold, we then replace the Bridge purchase loan with Permanent Financing.
Therefore, the Bridge Loan is a great way to allow BUYERS to obtain Approval Letters WITHOUT THE CONTINGENCY TO SELL THEIR CURRENT HOME!